[jeremysmyth]

You're ignoring the opportunity cost of not keeping that $200,000 in the "rich family's" deposit account or asset portfolio. If I buy something to use for $200k, I can't invest that same amount to convert it to $300k (assuming the same 20 years @ 4%), so I effectively lose 100k over the same period for the same reason. While they're certainly not equivalent, they're closer than you suggest.

[d4vlx]

Houses typically appreciate at better than 4% a year over 20 year time frames, although this is very location dependent. If they had bought in almost any city in the US with a population over a million they could have done much better.

http://www.census.gov/const/uspriceann.pdf